Draft Guidelines for Merger Assessment: ACCC Calls for Public Comment

Following significant reforms to the Competition and Consumer Act 2010 (Cth) (the Act) as a result of the passage of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 on 10 December 2024, set to introduce a raft of changes to the merger control regime regime in Australia with effect from 1 January 2026, the Australian Competition and Consumer Commission (ACCC) has on 20 March 2025 released a draft of its updated Merger Assessment Guidelines (Guidelines), inviting public submissions by interested parties 17 April 2025.

The Guidelines are intended to detail the general principles of the ACCC’s approach in evaluating mergers under the new legislative regime in determining whether a merger, if put into effect, would have the effect, or be likely to have the effect, of substantially lessening competition in any market as contemplated under the Act.

While the Guidelines provide a detailed overview of the ACCC’s approach to merger determinations the key points of the draft guidelines are as follows:

Overview

The Guidelines outline the ACCC’s approach to assessing mergers, indicating that the ACCC is focusing on maintaining competitive markets that benefit consumers and the economy. The document is structured to offer clarity on its analytical framework, specific merger issues it considers, and the countervailing factors it will have regard to in its assessments under the new regime.

Analytical Framework

The Guidelines emphasise the importance of competition as a process of rivalry, driving efficiency and innovation and provides the ACCC’s views on how mergers can potentially lessen competition by creating, strengthening, or entrenching market power.

In brief, the Guidelines note that the assessment it undertakes in a merger evaluation is forward-looking, predicting the future impact of mergers on competition, and distinguishes between horizontal, vertical, and conglomerate mergers, providing for unique considerations in respect of each type of merger (further discussed below).

Mergers Between Competitors (Unilateral Effects)

Broadly, for mergers involving competitors, the Guidelines set out that the ACCC will analyse the closeness of competition between merging parties and the effectiveness of remaining competitors (including, where relevant, from imports in addition to domestic competition). Differentiated products are assessed based on how closely they compete, while undifferentiated products are considered in terms of their impact on output and prices.

Coordinated Effects

The Guidelines address the ACCC’s approach to considering coordinated effects on a market. As addressed recently in Applications by Australia and New Zealand Banking Group Limited and Suncorp Group Limited [2024] ACompT, and referenced in the Guidelines, coordination may be tacit or explicit and will not necessarily involve any conduct that otherwise breaches of the Act.

In essence, coordinated effects occur when occurs when a group of firms, including the merged firm, interact in a way that limits competition between them.

Excluding express coordination (which otherwise breaches the Act), the Guidelines set out a variety of factors that the ACCC may consider to determine whether may indicate that the likelihood for successful coordination increases as a result of a merger, including the concentration of the relevant market, whether there are high barriers to entry, the transparency in that market, differentiation between products and the incentives to deviate from any coordination  occurring.

Non-Horizontal Mergers

Non-horizontal mergers, including vertical and conglomerate mergers, are assessed for their potential to foreclose rivals. Vertical mergers are evaluated for input and customer foreclosure, while conglomerate mergers are assessed for their impact on leveraging market power across related markets.

Specific Merger Issues

The Guidelines also address specific concerns such as the acquisition of vigorous and effective competitors (mavericks), the elimination of potential competition, and mergers involving competing buyers. They also consider the unique challenges of multi-sided platforms that serve multiple customer groups.

Countervailing Factors

The ACCC also expressly sets out that the countervailing factors that it might consider mitigates competition concerns in any merger review, such as the likelihood, timeliness, and sufficiency of new entry or expansion by rivals. The Guidelines also evaluate the countervailing power of customers and whether efficiencies from the merger enhance rivalry.

Public Benefits

Under the new merger regime under the Act, businesses may apply for merger authorisation, either on the basis the acquisition is not likely to substantially lessen competition (which the above considerations apply to), or because it will result in a net public benefit. In respect of the latter, in essence, the ACCC must be satisfied that the merger would result in a benefit to the public and this outweighs the determinant arising as a result of the merger.

The Guidelines provide a framework for the ACCC’s weighing of the public benefits of a merger against its detriments, and details information that it would use in reaching any assessment that the benefits and detriments have been quantified appropriately, including the appropriate evidence for such submissions.

If you have any questions regarding the new merger control regime, or the draft Guidelines, please reach out to us.